What is Spread? - Definition & Explanation
Definition
The difference between the bid and ask price, representing the broker's primary cost to the trader.
Spread Explained
The spread is the difference between the bid and ask price. It represents the primary cost of trading forex. Spreads can be fixed or variable
A competitive EUR/USD spread ranges from 0.1 to 1.0 pips.
Related Terms
Pip
The smallest standard price movement in a currency pair, typically 0.0001.
Bid-Ask Spread
The difference between the bid and ask price of a currency pair.
Commission
A fee charged by a broker per trade, separate from the spread.
ECN (Electronic Communication Network)
A system that matches buy and sell orders directly between market participants.